The Central Bank of Nigeria, CBN, has advised Nigerians against the use of virtual currencies, including bitcoin, ripples, litecoin.

Recall that the Securities and Exchange Commission, SEC, issued a similar warning last week.

The warnings came on the heels of announcement by Mavrodi Mondial Movement, MMM, that its operations will now be via digital currency.

Other ponzi schemes are asking their subscribers to start investing with digital currency.

In a statement yesterday, CBN said virtual currencies are largely used in terrorism financing and money laundering, considering the anonymity of virtual transactions.

The statement reads:“The attention of bank and other financial institutions is hereby drawn to the above risks and you are required to take the following actions pending substantive regulation or decision by the CBN.

“Ensure that you do not use, hold, trade and/or transact in any way in virtual currencies. Ensure that existing customers that are virtual currency exchangers have effective capital AML/CFT controls that enable them to comply with customer identification, verification and transfer, monitoring requirements.

“Where banks or other financial institutions are not satisfied with the controls put in place by the virtual currency exchanger/customers, the relationship should be discontinued immediately.

“Any suspicious transactions by these customers should immediately be reported to the Nigerian Finance Intellignece Unit (NFIU).

“The CBN reiterates that VCs such as bitcoin, ripples, monero, litecoin, dogecion, onecoin, etc., and similar products are not legal tenders in Nigeria.

“Thus, any bank or institution that transacts in such businesses does so at its own risk.”

Bitcoin was the best performing currency of the year 2016. It has appreciated from four cents in 2010 to over $1,000 in 2017.

Meanwhile, MMM may be considering increase in interest rate to lure more participants to join the scheme.